Paying self assessment - when to pay?
Discussion
Hi Forum,
Just finished my self assess tax return. There's a bill to be paid by 31 Jan.
Now, the question - am I better off just paying it now, or waiting until nearer Jan?
I don't know if the tax man charges interest or not, and obviously at the moment it's either in the premium bonds (gaining interest), or in my Alfa Romeo fund (which is my interest)
If tax man charges interest, I'll just pay it now so it's 1 less thing to think about.
Thanks in advance!
Gump
Just finished my self assess tax return. There's a bill to be paid by 31 Jan.
Now, the question - am I better off just paying it now, or waiting until nearer Jan?
I don't know if the tax man charges interest or not, and obviously at the moment it's either in the premium bonds (gaining interest), or in my Alfa Romeo fund (which is my interest)
If tax man charges interest, I'll just pay it now so it's 1 less thing to think about.Thanks in advance!
Gump
You'll only get charged interest if it's paid after the due date, ie 31st Jan 2025. No point, financially, paying it early. However, as you say, its one less thing to remember so unless its a large amount - I'd pay it. In fact, I did pay it - did mine about 3 weeks ago and just paid it straight away.
Ezra said:
You'll only get charged interest if it's paid after the due date, ie 31st Jan 2025. No point, financially, paying it early. However, as you say, its one less thing to remember so unless its a large amount - I'd pay it. In fact, I did pay it - did mine about 3 weeks ago and just paid it straight away.
Technically, your self assessment has to be submitted by the 31st, you then have 14(?) days to pay any liability.Thanks forum! Much appreciated.
Below pretty much sums up my take on it..
Below pretty much sums up my take on it..
Muzzer79 said:
2. Out of sheer principle - they make it difficult for me, so I pay as late as I can.
...The interest gained from 3.5k for 4 months is almost certainly less than 75 quid, but since the other year when HMRC did me over royally, any "win" over the tax man (however trivial) feels like when you drive off before the traffic warden can get his camera out =)Muzzer79 said:
There's no interest, as long as you pay by the 31 Jan deadline for previous financial year.
I pay in the last week of January
1. Because the money earns interest in my ISA, rather than HMRC's account
2. Out of sheer principle - they make it difficult for me, so I pay as late as I can.
SameI pay in the last week of January
1. Because the money earns interest in my ISA, rather than HMRC's account
2. Out of sheer principle - they make it difficult for me, so I pay as late as I can.
blueg33 said:
Even on PAYE? I've never had that.
Basically, if 80% or over of your tax liability is automatically and correctly paid through PAYE, then, even if your Self Assessment element of the tax liability exceeds £1,000, you don't need to make Payments on Account.
However, there are quite a few people who pay some tax through PAYE but who still need to make Payments on Account.
Eric Mc said:
blueg33 said:
Even on PAYE? I've never had that.
Basically, if 80% or over of your tax liability is automatically and correctly paid through PAYE, then, even if your Self Assessment element of the tax liability exceeds £1,000, you don't need to make Payments on Account.
However, there are quite a few people who pay some tax through PAYE but who still need to make Payments on Account.
As i am now a contractor outside IR35, will I have to do that? Mainly paid in dividends.
Yes.
If the PAYE tax makes up less than 80% of your total tax liability, you will have to make Payments on Account.
There are other reasons why Payments on Account may not be due. The most common "other" reason is that the source of income that gives rise to your Self Assessment tax ceases. For example, your self employment has ceased or you no longer have rental income or (perhaps) you no longer receive dividends.
If the PAYE tax makes up less than 80% of your total tax liability, you will have to make Payments on Account.
There are other reasons why Payments on Account may not be due. The most common "other" reason is that the source of income that gives rise to your Self Assessment tax ceases. For example, your self employment has ceased or you no longer have rental income or (perhaps) you no longer receive dividends.
Eric Mc said:
Yes.
If the PAYE tax makes up less than 80% of your total tax liability, you will have to make Payments on Account.
There are other reasons why Payments on Account may not be due. The most common "other" reason is that the source of income that gives rise to your Self Assessment tax ceases. For example, your self employment has ceased or you no longer have rental income or (perhaps) you no longer receive dividends.
Ah thats a relief (pun intended) my work is interim and unpredictable, so dividends could be turned off and on. Hmm, if I am due a refund will HMRC pay me on account in advance?.................... If the PAYE tax makes up less than 80% of your total tax liability, you will have to make Payments on Account.
There are other reasons why Payments on Account may not be due. The most common "other" reason is that the source of income that gives rise to your Self Assessment tax ceases. For example, your self employment has ceased or you no longer have rental income or (perhaps) you no longer receive dividends.
Gassing Station | Finance | Top of Page | What's New | My Stuff